Abdul Oroh, Edo State commissioner for agriculture and natural resources, in a recent media parley, highlights how the private sector, with support from the government, can improve local production and drive the growth of the agricultural sector, and the immense opportunities available to investors in the state. Excerpts by OLUYINKA ALAWODE.
Programmes
No government can survive if it does not develop agriculture. So, we have designed a system to attract the private sector to be partners in progress, but not just partners with private sector investment, but with our communities. The partnership will be between us, the communities and the private sector sharing that sense of ownership in the process of creating those industries.
After our strategic planning, we organised an agro-business summit – the first Edo State Business Summit – where we showcased what we have. We sold our plans to the investment communities. We have got inquiries from frontline investors.
For example, we just finished agreement with Dufil, surveying the 60,000 hectares of land asked for the establishment of crude palm oil plantation, and we also have other investors and groups that have applied to us. We have a land bank of about 300,000 hectares of land which we have identified in the three senatorial districts in the state. We have adequate rainfall for about two-thirds of the year in all the zones and a lot of water bodies crossing the whole state.
Communities
Our policy is based on the principle of free trial and informed consent of the communities. We want to achieve this policy through discussions with the communities because we want them to be part owners of the process. We do not want a repeat of what happened in the Niger Delta where communities fought with the investors. But I am sure investors have found our people to be very hospitable. No major investor here can come out to say they have issues with the community they are operating in.
Resources
The state is a nodal state connecting all the communities and economic centres easily. One can reach everywhere with perfect good routes from Edo State, and we feel we can establish the biggest fresh food market in Africa. We also have a lot of gas and the two biggest Independent Power Projects (IPP) are in the state. We also want to be part of the energy hub because the major transmission lines and gas pipelines are also in the state. We also have a rubber research institute. We have a branch of the Cocoa Research Institute. We also have the Nigerian Institute for Oil Palm Research (NIFOR) all in Benin City.
Investors’ interest
Talking about oil palm, we can start harvesting after 18 months of planting, and we can also harvest for 30 years or more. A barrel of crude palm oil is $700, and the value of crude oil is lower than $46. We are not panicking in Edo State because we are not dependent on crude oil. We want to develop agriculture and this is an opportunity for us. I believe that this is the reason Dufil has come to invest in the state for better economic development of the nation and the country.
Demand-supply gap in oil palm industry
The propensity to import is still there and there is a supply vacuum, which means what is produced locally cannot meet local demand. So, even if we double or triple our local production now, we probably will still not meet the local demand.
FG’s backward integration policy for oil palm
Well, to have a backward integration policy is not a bad policy. Palm kernel oil is almost twice the amount of crude oil palm. Presco generates about 95 percent of electricity from palm kernel oil waste. We commissioned the plant sometimes last year, and they are even flaring some. They do not depend on PHCN, and they also distribute power to some other communities while the remaining 5 percent is diesel. There is so much advantage in putting a lot of investment in agriculture. If we invest in the production of oil palm or rice, cocoa and even cassava because of the value chain, we will gain the whole world. We have the advantage of the European Union (EU) market and we have an ambition to grow more than we are doing today.
Driving the market
Dufil is not coming in to learn on the job, they have experience and are also already on ground producing Indomie noodles. In fact Nigerians and Americans eat Indomie noodles. Indomie is a very successful brand and the producers of this brand have also diversified into vegetable oil. The advantages are very many and the best way to start is what we are doing presently which is to provide lands for investment in agriculture – land, labour and capital, elementary economics. We have a fairly educated labour force or ‘educatable’ labour force – people that can be trained and willing to be trained. We have a friendly infrastructural base where most of our rural areas are connected with accessible roads. So, with their experience in other countries and Nigeria, and their capacity to raise money from the banks or from the international community to invest, the sky is our stepping stone. All we need is just to give them incentives, security, lands and visible co-existence. According to the Governor of the State, once we see that they are serious, we will give them a free Certificate of Occupancy.
I also expect the federal government to give their own incentives too. We do not control international trade as a sub national state. We do not control waivers and imports and we also cannot guarantee a loan for investments, only the federal government can do this under their various promotional schemes. We expect that if the federal government is serious about the agricultural transformation schemes, they should be able to support industries to grow.
Import
I advise that anything we can produce must be encouraged so that we can produce more. It should be noted that even in this modern world of globalisation, you cannot impose total ban on import. I believe if we are producing sufficiently, the market forces will determine whether to import or not. But because we are not producing enough we have to import. If people know they can get palm oil in Edo State from Dufil and other investors, why will they want to import from Malaysia and Indonesia?
Private company investments
We are looking at $1.5 billion. The first grand proposal from Dufil was about $600 million. Other investors are also willing to spend $430 million and some are planning to start small while some plan to start big. This is just the beginning. They are ready to start off in a big way and we know that when we finish the paper work with Dufil, they also have the capacity to come out in a big way. The good news is that we have a government that is trusted by the people because they have seen developmental changes in the state and they yearn for more.
Advice
To manufacturers, I say see opportunities; you cannot have challenges without opportunities.
OLUYINKA ALAWODE
